The last frayed thread by which Graeme Souness clung on at Newcastle United was cut yesterday morning. In the wake of the dismal 3-0 defeat at Manchester City on Wednesday night, Souness's underachieving and sometimes confrontational 17 months in charge at St James' Park was brought to an end by a board fearful of economic meltdown should Newcastle be relegated from the Premiership. The final cut was made by telephone.

Glenn Roeder, the former manager of West Ham United, former Newcastle player and the club's academy director, has been placed in charge. Alan Shearer, captain and club hero, will assist Roeder. Their first game will be tomorrow's home game against Portsmouth which, with Newcastle now 15th in the Premiership and embroiled in a relegation battle, has the feel of a six-pointer.

There was immediate speculation that Shearer will be the next full-time manager once he retires from playing in the summer, but he is not minded to take over then and still wants a break from football after 18 seasons as a first-team regular at Southampton, Blackburn Rovers and his hometown club. Shearer retains his long-term ambition to be a manager, though.

Roeder, like Shearer, does not yet possess the necessary badges now required to manage more than temporarily in the Premiership - the rules have changed since he was in charge at Upton Park between 2001-2003 - and he is not a contender to succeed Souness permanently.

The regulations state, in fact, that Roeder can be in charge for only 12 weeks and there are 14 weeks of the Premiership season left. By the end of April Roeder, Shearer and the Newcastle board hope yesterday's decision will have brought them safety.

"All we can do is gather ourselves on Friday morning and go and pick a team that is going to beat Portsmouth on Saturday afternoon," Roeder said on the club website last night. "It won't be easy but we will lift spirits and be very positive."

The interim appointment means the board - principally the chairman Freddy Shepherd, Douglas Hall and Sir John Hall - will be able to appoint a long-term successor with Bolton's Sam Allardyce, Martin O'Neill and Paul Jewell the figures Newcastle are known to have considered.

Allardyce and O'Neill are candidates for the England job when Sven-Goran Eriksson departs after the World Cup and would presumably accept that post if offered. But Allardyce and O'Neill are also known to view re-invigorating Newcastle as a task they could take on. Allardyce has been offered the post before and while there have been denials of recent contact between him and Shepherd, this has not stopped manoeuvring behind the scenes.

O'Neill remains out of the game, caring for his ill wife Geraldine. He is keen to return to management but it is premature to make any assumptions about his willingness, if offered, to take on Newcastle ahead of England or any other position that may arise this summer. But he would be popular among fans.

Jewell has impressed the country with his management of Wigan Athletic in the Premiership this season and at 41 he has hunger to match his undoubted talent. It is understood he has a £500,000 get-out clause in his contract with Wigan but his annual salary is considerably more than that and he is not the cheap alternative.

The financial aspect of Newcastle's decline under Souness cannot be overstated. But it was the board that made the appointment, wrote a contract that seemingly entitles him to a £3m pay-off and which sanctioned the £8.5m signing of Jean-Alain Boumsong and the £9m signing of Albert Luque.

"I am saddened at the way things have worked out," said Souness, who is now expected to retire to Australia. "I wish the club, the players and the supporters good fortune and success going forward."

There was no comment on Souness's assistants Dean Saunders, Alan Murray and Roy Tunks but they are also expected to depart. That is estimated to take the whole pay-off package close to £5m.